Keybot the Quant™

Keybot the Quant™ is a statistical arbitrage algorithm, or, more simply, a stock market timing model, that oscillates from long to short, bullish to bearish, respectively, and back again, using the SPX (S&P 500) as the benchmark index. Disclaimer: This blog and all its contents are for educational and entertainment purposes only. Do not trade or invest based on any content on this blog. Please read the Terms of Service. Thank you for your interest and support.

Tuesday, March 3, 2015

Keybot the Quant flips to the short side today shortly before lunch at SPX 2104. The weakness in utilities and copper are creating market weakness. Bulls need to push JJC above 32.01 to stop the market selling. Bears need either UTIL under 573 or XLF under 24.15 to create the next leg lower in equities. If UTIL 573 fails, consider that as a trap-door in markets and a large flush lower in stocks will occur in quick order.

The Keybot the Quant algorithm program and the actual trading both gain +2.5% on the last trade. The benchmark SPX is up +2.2% this year. Keybot exits SPY and enters SDS. The 35-day single ETF timer expires so the algo is back to the double ETF's again. The bears are driving the bus. As always, stay alert for a whipsaw. Watch JJC 32.01 since it will tell you if markets continue lower or if the bulls can stage a comeback rally. JJC is currently printing 31.75.

Monday, March 2, 2015

Keybot the Quant remains long moving into the Tuesday session. The bulls pushed copper higher with JJC up to 32.28 creating the afternoon stock market rally. The bull-bear line in the sand is JJC 32.01. UTIL is under the 596 level in play all this week so that creates market negativity. The algo is now tracking UTIL 573.33 as another bull-bear level of import. UTIL is at 583.20. Thus, bulls need UTIL above 596 and/or GTX above 3390 to receive upside fuel. Both of these appear difficult so the stock market upside may be limited.

Bears need to push UTIL under 573.33 and/or JJC under 32.01 to take control of equities. If either UTIL drops under 573.33 or JJC under 32.01, either one will do, and the SPX drops under 2105, Keybot will likely flip short. If either of these two parameters turn bearish consider the imminent turn notation to be in play. If UTIL stays above 573, and JJC above 32.01, status quo, equities will float sideways to sideways higher.

For the SPX starting at 2117, the bulls need less than one point higher to accelerate a move several handles higher so watch to see if the S&P futures are positive overnight which will point the way to bull victory on Tuesday. The bears need to push under 2105 to accelerate the downside. A move through 2106-2116 is sideways action.

Keybot the Quant remains long. The bulls throw a euphoric party with the Nasdaq hitting 5000 not seen in 15 years. Treasury rates jump higher so utilities are in complete collapse. UTIL tumbles to 579 which is an ominous signal for markets for the weeks ahead. Copper remains buoyant so the bulls are able to print new highs in stocks. JJC is at 32.13 remaining above the 32.00 bull-bear line in the sand identified by the algorithm albeit by 13 pennies.Watch copper like a hawk; it is running the show today and the major influence on stock market direction. If JJC drops under 32, markets will begin selling off. If JJC loses 32, and the SPX drops under 2104, and both remain under, Keybot will likely flip short. Hence, the caution appears in the title line. If JJC loses 32 consider the imminent turn status to be in play. So despite the euphoric equity highs, the market metrics are shaky. If copper moves strongly higher the bulls will be creating further new highs in equities.
The SPX is battling at the 2113-2114 area trying to create an upside acceleration but cannot yet push up through; the bears are maintaining this level as a resistance ceiling. JJC 32.00 determines the market directional answer. JJC is currently printing at 32.19 so the bulls are now 19 cents on the good side. Bears need to push copper lower or they got nothing.

The February publication of the Daily Chronology of Global Markets and World Economics 2015-02 is available through Amazon (AMZN). February is another wild month for markets. Stocks were trading choppy sideways chewing up bulls and bears but the bulls win out in February catapulting markets higher on the Ukraine ceasefire, Greece bailout and central banker happy talk. Deflation remains rampant in Europe. Global stock indexes are printing record highs with bond yields at record lows. One-third of Europeans bonds are trading negatively!The West Coast dock slowdown created angst. Chinese rings in the lunar New Year; the "Year of the Sheeple." Net neutrality is approved changing the internet forever; the government steps in to fix problems that do not exist. The Holy War waged by ISIS Islamist radicals against Christians and Jews continues. Social unrest and wars continue around the world. Ukraine fighting is ongoing despite the ceasefire. ISIS Islamist radicals are performing genocide against Christians and Jews while the world looks on.The chronology records economic history in real time preventing revisionist tampering in future years. Many of the same asset managers telling everyone to go long the market in 2008 are repeating the same mantra these days. Their quotes and words are recorded. Perhaps they are correct with their market cheer leading; perhaps they are not. If a multi-year top prints during the weeks ahead, the chronology serves as the most accurate accounting of the market topping process. The chronology is the most reliable and easy to understand source on the web or in hard print explaining global markets.As always, all monthly publications are available from the links in the left margin. We are living through historic stock market and economic times. The daily chronology is the most accurate accounting on how a potential epic stock market top forms in real-time. The detailed chronology prevents the writing of revisionist history in the future.The monthly publications are compatible with most electronic devices and include an extensive Business Acronym List and Ticker Symbol List. The Acronym List is the most comprehensive list available on the internet. The chronology is not available in hard copy and only distributed around the world electronically.Daily Chronology of Global Markets and World Economics February 2015-02

Sunday, March 1, 2015

Keybot the Quant remains long moving into the new week of trading. UTIL begins at 594.17 below the important 596 level that is in play for every day this week. This will provide the bears an edge but if UTIL jumps higher at the opening bell above 596 the fix is in and the bulls are going to run stocks higher.JJC begins at 32.19 above the important 31.98 bull-bear level identified by the algo.This creates market lift and the strength in copper last week prevented equities from moving lower. Watch copper overnight into Monday for an early tell on market direction. If copper is weak the bears are in good shape especially with UTIL under 596. If copper is trading higher overnight, JJC will move higher and the bears will be slapped in the face.

For the SPX starting at 2104.50, the bulls need to push 8 points higher, above 2112.50 and bingo, the upside will accelerate into a big bull party. The market bears have an easier path only needing to push under the 2104 level, less than one point lower, and boom, the SPX will accelerate lower likely in concert with falling utilities and copper. A move through 2104-2112 is sideways action to begin the week. The bulls continue to have the wind at their backs with the algo number 23 points above the signal line. The graphical printout for the algorithm is at its heart an oscillator (a chart that moves above and below a mid-point similar to RSI and MACD indicators on stock charts) so the +84 number above the 80 level indicates an overbot condition.

Friday, February 27, 2015

Keybot the Quant remains long through the weekend. The bulls push copper higher with JJC above 31.98 keeping equities buoyant. UTIL closes under 596 which will create market negativity. Monday will be a battle of copper versus utilities.

Keybot the Quant remains long the market. The bulls receive upside strength from stronger copper. The algo is tracking JJC 31.98 and the weakness after the bell occurs with copper dropping under this key level. Use this as the main rudder for market direction to end the week. Stocks move higher with JJC above 31.98 and equities move lower with JJC under 31.98. JJC is currently printing........ wait for it......... 31.98. So this pivot tells you which direction stocks go today.

Note that utilities drift lower. The UTIL 596 level is key for all of next week so watch to see where price closes today. If UTIL is under 596, stocks will be weaker come Monday Morning. If UTIL finishes above 596, the market bulls will have a big party next week. Keybot prints one number yesterday and today prints two numbers thus far with one hour of trading completed. The bulls remain in control with the algo number 11 points above the signal line. As copper goes, so goes the markets.

Wednesday, February 25, 2015

Keybot the Quant remains long moving into the Thursday session. The algo idled along on Wednesday without printing any numbers. Note how UTIL dropped today to 598 but bears would need a move under 586 on Thursday or Friday, or a move under 596 any day next week, to create negativity in equities. Bears also need either VIX above 16.20 or XLF under 24.10 but these parameters are firmly in the bull camp creating stock market lift.

The market bulls need higher copper and commodities to receive the blessing for higher equities ahead. Bulls need JJC above 31.95 now at 31.66 only about 30 cents away. If JJC moves above 31.95, the bulls lock in upside victory with the SPX above 2120 and running well into and through the 2120's. So watch copper closely.

For the SPX starting at 2114 on Thursday, the bulls need to touch the 2120 handle and the upside will accelerate (watch to see if JJC will provide fuel above 31.95). The bears need to push under 2110 to accelerate the downside. A move through 2111-2119 is sideways action for Thursday. As a general rule, it looks like 'as copper goes, so goes the markets'.

Keybot the Quant remains long as Wednesday trading is underway. Nefarious computer bugs are creating technical issues this morning but the systems are fending off the attacks and stabilizing. The bulls remain in the driver's seat. Bulls need copper and commodities to strengthen to send the stock market higher and neither are cooperating as yet. Bears need VIX above 16.20 and/or XLF under 24.10 but both remain strong.At the Friday close and for all of next week, UTIL 596 will be a very important level. UTIL is above 600 so bulls are receiving upside stock market juice from the buoyant utilities. Stocks will weaken if UTIL leaks below 596 next week but has to fall under 586 for this week to cause market weakness.

For the SPX starting at 2115, the bulls need to touch the 2118 handle and bingo, price will be above 2120 in an instant. The bears must push under 2106 to create a downside acceleration. A move through 2107-2117 is sideways action for Wednesday. The bulls are in charge.

Tuesday, February 24, 2015

Keybot the Quant remains long as the bulls are on cruise control. Financials run higher and volatility drops like a stone creating new all-time stock market highs. Copper is adding further strength producing a dramatic turnaround ot the upside. JJC is up to 31.82 and the algo identifies the 31.97 level as a critical bull-bear line in the sand. If JJC moves above 31.97, the SPX will launch above 3120 and higher. So the battle ground is copper, at JJC 31.97, which will tell you if the upside stock market rally has far stronger legs, or, if the bulls are ready to run out of gas.

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